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Key Points:
- Total Rent Increase: LondonMetric added £8.5 million in additional annual rent through rent reviews and lettings.
- Significant Rent Uplift: Urban logistics rent reviews achieved a 25% uplift, reflecting strong demand in the sector.
- High-Profile Lettings: Notable deals include new leases with M&S, Sainsbury's, and FPS, contributing to income growth across LondonMetric’s logistics and retail assets.
LondonMetric Property Plc (LSE:LMP) has announced a series of successful occupational transactions, resulting in £8.5 million of additional annual rent for the financial year to date. These transactions include rent reviews, new lettings, and regears across their logistics and retail warehousing assets, further strengthening the company's rental income and extending the weighted average unexpired lease term (WAULT) on key properties.
Rent Review Uplifts
Since March 31, 2024, LondonMetric has settled 139 rent reviews, adding £5.7 million in new rent. This marks a 17% uplift on a five-year equivalent basis, with urban logistics assets performing exceptionally well, delivering a 25% increase. The robust performance in urban logistics highlights the continued demand for well-located warehousing space, especially in key metropolitan areas where last-mile delivery requirements remain strong.
Key Lettings
In addition to rent reviews, LondonMetric has signed 27 lettings, contributing a further £2.8 million in rent. Several high-profile deals have been completed across its logistics and retail portfolio:
- Distribution Warehouse Regears: LondonMetric secured lease regears on three distribution warehouses in Havant, Greenford, and Dudley, collectively increasing annual rents by 51% to £1.4 million. The regears extended the WAULT to over ten years, demonstrating the company’s ability to lock in long-term income.
- New Weymouth Development: A 42,000 sq ft letting to M&S for a new full-line store in Weymouth was signed on a 15-year lease at £0.9 million per annum. The development, which recently obtained planning consent, is expected to yield 8% on cost and is set to be completed in Spring 2026. The deal signifies LondonMetric's commitment to expanding its retail warehousing footprint with high-quality tenants.
- Cardiff Logistics Letting: Ferraris Piston Service (FPS) signed a 36,000 sq ft distribution warehouse lease in Cardiff on a 15-year term, adding £0.4 million in annual rent. This development is set to deliver a 7% yield on cost and is scheduled for completion in Spring 2025, underscoring the steady demand for logistics properties in strategic UK locations.
- Bromsgrove Reletting: Sainsbury's took over a 25,000 sq ft space from Homebase in Bromsgrove, replacing the former tenant at a 24% higher rent, contributing £0.5 million annually. The ten-year lease to Sainsbury’s reflects the increasing attractiveness of convenience grocery retail within LondonMetric's portfolio.
- Howdens and Tapi Lettings: Two lettings were secured for recently vacated warehouses in Dulwich and Old Kent Road. These leases, signed with Howdens and Tapi, will provide a combined rental income of £0.5 million per year with a WAULT of ten years.
Outlook and Future Developments
The successful transactions reflect LondonMetric’s strategic focus on logistics and retail warehousing assets, two sectors that continue to exhibit strong rental growth and tenant demand. The company’s ability to deliver significant rent uplifts across its portfolio, coupled with its targeted development program, positions it well for sustained income growth in the coming years.
LondonMetric’s market resilience and proactive asset management have enabled the company to capitalize on rising tenant demand in the logistics and retail sectors. The recent rent reviews and lettings will not only bolster its rental income but also extend lease terms, thereby securing long-term revenue streams for the future.
